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Boomer Bashing

By Floyd Norris September 3, 2006 3:07 pmSeptember 3, 2006 3:07 pm

Ford workers picketing for pensions in 1949.

My Friday column, which noted that baby boomer managers were busy eliminating pension benefits for those who would follow them, has produced reactions from both those younger and older than the boomers. One self-described member of Generation X called boomers selfish and hypocritical, and added that most of them were bad managers anyway.

And this, from Warner B. Huck of Hilton Head, South Carolina

“As a WWII veteran, who is comfortably retired from a Fortune 500 Company, I am shocked by the E.I. DuPont pension plan revision that you reported on in Friday’s New York Times.

“As you observed, this trend toward reduced benefits in Corporate America has been building since my retirement 20 years ago, although these have generally been prosperous years. I wonder why?

“My conclusion is that when Corporate America was managed by WWII veterans, who had a commonality with their employees (the Great Depression and the Great War), executives were more concerned about worker welfare then today’s Boomer executives, most of whom were sheltered from the Vietnam War by deferments and preferential treatment, and have little or no common bond with their less fortunate employees.

Commonality, or lack there of is something that is pervasive throught the country and explains much behavior not only in companies but also in politics. I quite never put the WWII veterans opposite behavior as explaining the presence of it, but it certainly could be a major factor. It has to come from some common value system that motivates cultural norms. The competitive spirit is important and requires also the cooperative spirit. I hope we can hear from other WWII era employees who are now retired also.

The American auto industry supplies the counterexample to the blame-it-on-the-boomers explanation of vaporizing pensions. While they were run by the WW II vets, they lost me as a future customer when I learned the phrase “planned obsolescence” as a kid. And the managements agreed to pension and health benefits without thought to the demographics. And the managements clung to old models — pun intended — instead of being open to change. That legacy persists along with the legacy financial obligations. Blame-the-boomers is too easy a game.

I agree with both the retiree and the younger worker is correct. It’s all about them. They don’t care about anybody except themselves. After we have worked so hard in making these companies profitable now they are telling us we don’t need you anymore. At my company, which I have been at for 28 years, we are threatened daily with reduced benefits, higher co-pays, as their bonuses increases yearly and they pat themselves on the back for doing such a good job while the company is just one foot from bankruptcy. Go figure.

As a baby boomer myself, I’m tired of people complaining about shrinking pensions, longer work weeks, families without health care insurance, sky-high executive pay. These people need to elect legislators that can rein in these huge multi-national corporations. I’m not sure if our current system of government of the lobbyists, by the lobbyists, and for the lobbyists can handle the needed changes.

If you think the next generation is going to tolerate this extreme corporate greed AND pay the social security benefits for the baby boomers, then you must be smoking rope.

I think it’s nonsense to blame a specific generation for corporate cutbacks– and I say that not because I’m a boomer. The older generation of managers paid high benefits because the HAD to in order to keep a work force happy and the unions off their corporate backs. The current managers are cutting back because their predecessors overpaid and because now they CAN cut back on the benefits. Any businessman, regardless of age, would do what they’re doing. The circumstances of the day dictate, not the date of birth of the manager.

I’m getting seriously tired of ‘Pin-the-Tail-on-the-Boomers’ particulary this tendency to make ludicrously broad generalizations about 70 million people born over the course of almost 30 years. Four separate cohorts. I take particular exception to being blamed for trends which date back to the previous generation – the Boomers’ parents. And laws passed when they were in charge as well.

Let’s see…when was ERISA ‘reformed’ to allow companies to loot their defined benefit pension funds on a vast scale? Oh, yeah. 1981. Under the 75 year old Ronald Reagan. Gonna somehow claim he was a Boomer, too?

I was in Fiduciary Taxation, and in my early 30’s, at the time and I thought it was the height of irony that the oldest president should preside over the dismantling of pensions for my whole generation. Gee, thanks, Ronnie.

‘Screw over the Boomers’ has been pretty much been the course of my times. When did wages permanently cease to keep up with inflation? 1973. The whole of my working life has been about diminishing returns and the consolidation of wealth in the Boomers’ Parents generation.

You can’t blame one generation. First, the trend toward cutting benefits began before the boomers were in control of major corporations. Second, the WWII generation trained the boomers. Third, it’s the investors, led by seniors like Warren Buffett and Alan Greenspan, who’ve been demanding the cuts. Finally, apart from executive compensation, which is offensive but probably not significant overall, benefits are all that’s left to cut. Yes, I agree that corporate America has betrayed a lot of workers, but that’s a process that began at least 25 years ago.

American business has a long history of viewing labor as a commodity. American business resisted the development of labor unions because they felt that any organized effort to negotiate wages, hours and working conditions and threaten the business owner with a strike was theft of private property. The business owners believed that the only decision that American workers have is to accept the wage and working conditions being offered or not.

The attitude of American business toward labor is no different today than it was in the last quarter of the nineteenth century.

America was founded on the value of freedom from government. It was the Puritins who defined the unemployed or underemployed as morally deficient. American business was most joyous when there was as little government regulation of how they conducted their businesses as possible. Americans have been very content with the domestic policies of the Republicans going back to Ronald Reagan.

I could be wrong, but here are my two cents: In my opinion the underlying issue here is the rising costs of employee benefit programs due to the ratio of retirement beneficiaries to workers. To put this in perspective, according to the Bureau of Labor and Statistics in 1950 there were 16 workers to support every one beneficiary of Social Security; today there are only 3.3 workers supporting each beneficiary. In 2008 when the peak of baby boomers will retire, there will only be 2 workers per beneficiary. The social security problem is indicative of the overall issue of the rising costs of fringe benefits that are causing employers to cut back or cancel programs. Boomers should not feel like they are personally to blame for these figures because the issue is obviously beyond their control. By 2041 the Social Security Administration web site reports that the program will be bankrupt. We have identified the problem, now we need a solution to the problem. Does anyone have any ideas?

“executives were more concerned about worker welfare then today’s Boomer executives, most of whom were sheltered from the Vietnam War by deferments and preferential treatment, and have little or no common bond with their less fortunate employees”.

Lets see:
GWBush preferential treatment: Jumped to the top of the list to get into a “champaign” national guard unit. Never went to Vietnam.
VP Cheney Deferments: received SIX deferments. Never went to Veitnam.
By the way: GWBush got into Harvard Business school with a C+ average

Boomers are getting screwed worse than any other generation by companies adopting cash balance pension plan conversions, which affect older workers (Boomers) who retired between 1995 and 2005. The federal General Accounting Office has found in studies that older workers have lost between 30%-50% of the pension benefit they were promised when their companies adopted cash balance plans which created “wearaway” because the companies lowballed the initial new cash balance plan benefit levels far below what older workers had already accrued under the companies traditional defined benefits pension plans. Congress outlawed wearaways in cash balance conversions in the 2006 pension reform bill, but that won’t help the millions of Boomers who lost pension benefits when they retired between 1990 and 2005. Younger workers will retire with larger cash balance benefits, but the Boomers have seen up to half the traditional pension plan benefits they were promised stolen by their employers, just as they arrived at retirement age. Hopefully the new congress will do something to help these millions of older workers and recent retirees to get those benefits back.

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